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k Minutes of actions taken by the Board of Governors of the erai Reserve System on Monday, August 2, 1949. PRESENT: Mr. McCabe, Chairman Mr. Draper Mr. Clayton Mr. Carpenter, Secretary Mr. Hammond, Assistant Secretary Mr. Morrill, Special Adviser Memorandum dated July 27, 1949, from Mr. Thomas, Director or the Division of Research and Statistics, recommending increases illthe basic annual salaries of the following employees in that Dil'isiola) effective August 7, 1949: tilArae ee C.—smith IC. Jacobus Title -Stenographer Clerk Clerk-Typist Salary Increase From To $2772I.00 $27799.24 2,498.28 2,573.52 Approved unanimously. Memorandum dated August 2, 1949, from Mr. Millard, Director or the Division of Examinations, recommending increases in the basic ItIll10143.1 s alaries of the following employees in that Division, effec- tilfe Alaguet 7, 1949: m Name 4'ThomPson ‘g.e E. Good Johnson 41411e M* Temple Title Federal Reserve Examiner Federal Reserve Examiner Assistant Federal Reserve Examiner Clerk Salary Increase TO From $774.20 $7771.6o 6,474.60 6,714.00 3,852.60 3,978.00 2,724.00 2,799.24 Approved unanimously. Memorandum dated August 1, 1949, from Mr. Bethea, Director of ision of Administrative Services, recommending that the •Dil ' 8/2/49 -2- IssIguation of Miss Lulu A. Sinclair, cafeteria helper in that Dibe accepted to be effective, in accordance with her reat the close of business July 28, 1949. Approved unanimously. Letter to Mr. Erickson, President of the Federal Reserve teailt Of Boston, reading as follows: "In accordance with the recommendation in your letter of May 19, 1949, the Board of Governors is Illaking no change at this time in the classification 0f member banks in your District for the purpose of electing Class A and Class B directors. It is noted 1.4 this connection that you expect to have this mater reviewed again at the beginning of next year. l'he Beard would appreciate being advised of the reOf this review and of any recommendations for 1:langes in classification that you may then deem desirable." Approved unanimously. Letter to Mr. Williams, President of the Federal Reserve krat Of P hiladelphia, reading as follows: "In accordance with the recommendation in your itter of July 8, 1949, the Board of Governors has anged the classification of member banks in your tustrict for the purpose of electing Class A and Class 1.!'. directors so that Group 1 will consist of banks with ital and surplus of over $999,000, Group 2 of banks welth capital and surplus of more than $300,000 but not a ceeding $999,000, and Group 3 of banks with capital 4C1 surplus of $300,000 or less." j Approved unanimously. Letter to Mr. Gidney, President of the Federal Reserve Of Cleveland, reading as follows: 320 8/2/49 -3- "In accordance with the recommendation in your letter of June 21, 1949, the Board of Governors has Changed the classification of member banks in your district for the purpose of electing Class A and Class 13 directors so that Group 1 will consist of banks with capital and surplus of $2,000,000 or more, Group 2 of banks with capital and surplus of more than $300,000 and less than $2,000,000, and Group 3 of banks with capital and surplus of $300,000 or less." Approved unanimously. Letter to Mr. Leach, President of the Federal Reserve Bank (If Richmond, reading as follows: "In accordance with the recommendation in your letters of May 6 and July 26, 1949, the Board of Gov. 7111°re has changed the classification of member banks n Your district for the purpose of electing Class A Class B directors so that Group 1 will consist of banks nks with capital and surplus in excess of $1,000,000, l'°u1:4 2 of banks with capital and surplus of $250,000 atd not exceeding $1,000,000, and Group 3 of banks with eaPital and surplus of less than $250,000." r Approved unanimously. or chi Letter to Mr. Young, President of the Federal Reserve Bank eago, reading as follows: "In accordance with the recommendation in your letter of May 20, 1949, the Board of Governors is makrio c hange at this time in the classification of eimber banks in your district for the purpose of elecvsng Class A and Class B directors. It is noted in : 18 connection that you anticipate a probable need 'ur reclassification prior to the 1950 election." T Approved unanimously. Letter to Mr. Davis, President of the Federal Reserve Bank "St. --Ule, reading as follows: 1_321 "In accordance with the recommendation in your letter of May 25, 1949, the Board of Governors has changed the classification of member banks in your district for the purpose of electing Class A and Class B directors so that Group I will consist of banks with cpital and surplus of over $)00,000, Group 2 of banks vlth capital and surplus of over 3155,000 but not over $)00,000, and Group 3 of banks with capital and surPlus of $155,000 and less." Approved unanimously. Letter to Mr. Peyton, President of the Federal Reserve Bank ) Cr -41rleaPOUS, reading as follows: "Your letter of April 27, 1949, with respect to the Classification of member banks for the purpose of electing Class A and B directors raises the question whether it, might be desirable to postpone any increase in the 'over limit of Group 1 until after the November election 11 , 1 1949 to avoid criticism from any member bank which mIght otherwise say that it had been denied the privilege Of voting this year. This question has had the careful consideration of the Board as it is one that is applile in all Federal Reserve districts. Any reclassifi' a"ion is bouna to defer or accelerate the voting of banks when they are moved from one group to another. Herel'°fore all changes in the classifications of banks have neerl currently effective and so far as the Board is aware °bjection has been raised to this procedure. "Accordingly, the Board of Governors has changed, ective immediately, the classification of member banks /13 district for the purpose of electing Class A and directorssor to conform to the suggestion in your letter s that Group I will consist of banks with capital and t"lus of $400,000 and over, Group 2 of banks with capi1 and surplus of $150,000 through $399,999, and Group or banks with capital and surplus of $149,999 and less." n T Approved unanimously. q 144 Letter to Mr. Leedy, President of the Federal Reserve as City, reading as follows: Bank flryz 8/2/49 "In accordance with the recommendation in your letters of March 12 and April 27, 1949, the Board of Governors has changed the classification of member banks in your district for the purpose of electing Class A and Class B directors so that Group I will consist of banks with capital and surplus of over S600,000, GrouP 2 of banks with capital and surplus of over $125,090 but not more than $600,000, and Group 3 of banks with capital and surplus of $125,000 and less." Approved unanimously. Letter to Mr. Gilbert, President of the Federal Reserve Bank Of 'Dallas, reading as follows: "In accordance with the recommendation in your letter of June 11, 1949, the Board of Governors has langed the classification of member banks in your dis,Isict for the purpose of electing Class A and Class B " .irectors so that Group 1 will consist of banks with 103aPital and surplus of $6)o,000 and over, Group 2 of lanks with capital and surplus of over $150,000 and ess than $6)0,000, and Group 3 of banks with capital arid surplus of $150,000 and less." V Approved unanimously. Letter to Mr. Earhart, President of the Federal Reserve Bank Of san l'rancisco, reading as follows: In accordance with the recommendation in your t of May 18, 1949, the Board of Governors has ,11111 . ged the classification of member banks in your disnet for the purpose of electing Class A and Class B ',silsectors so that Group 1 will consist of banks with Ic)e.Pital and surplus of $2,000,000 or over, Group 2 of le 'llks with capital and surplus of over $250,000 and .1.e. ?s than $2,000,000, and Group 3 of banks with capi' 5-1 and surplus of $250,000 or less." p Approved unanimously. 8/2/49 -6Letter to Mr. Roger W. Jones, Assistant Director, Legisla- tive Reference, Bureau of the Budget, reading as follows: "This refers to your request for the Board's comments on the enrolled bill S. 1184 to encourage construction of rental housing on or in areas adjacent to ArmY, Navy, Marine Corps and Air Force installations, ahd for other purposes. In a letter to you dated April 21, 1949, the Board eXPressed its views concerning the draft of the bill S. 1184. Although such draft of bill has been amended in several respects the amendments are not of such a character as would change the Board's views regarding the bill !,ts exPressed in its letter of April 21, 1949, and after Iurther consideration of the matter in connection with the bill, the Board feels that it has nothing to add to itS earlier letter." Approved unanimously. Letter to Mr. D. Emmert Brumbaugh, Secretary of Banking, Collat °Illgealth of Pennsylvania, Department of Banking, Harrisburg, Naslr, 4-Lvania, reading as follows: "This will acknowledge receipt of your letter of Julv -I, in which you state that a careful study of the ' - 11k Holding Company Bill is being made in your office bY the Legislative Committee of the National Assoth"i°7a of Supervisors of State Banks, and that when 4,_ese studies are completed you will appreciate a conrence with the Federal Reserve. I am sure that representatives of the Board will be glad to meet with you at °Me mutually convenient time after you have finished Your study of the bill." Approved unanimously. Letter to Mr. U. E. Baughman, Chief, U. S. Secret Service, Y DePartment, reading as follows: 8/2/49 -7- "Reference is made to your letter of July 12, 1949, suggesting that the Board assume the cost of Printing and addressing counterfeit warning cards. It is understood that you have in mind continuing the existing arrangement which began in 1941 whereby such cards are printed, addressed and placed in mail sacks by the DuPlicating and Mail Section of the Board's Division of Administrative Services, with the exception that in future the Division will not bill you for the cost of labor and material involved and you will not be expected to furnish the necessary paper stock. It is also understood that the Secret Service will continue to control the distribution of the cards, that the cards will continue to be mailed under your frank and that you will furnish suitable envelopes for this purpose when necessary. It is likewise understood that the arrangement would be subJect to discontinuance by the Board at any time. The Board is agreeable to undertaking this work at itS own expense until further notice on the basis outabove with the understanding now in effect that counterfeit warning cards will be printed as rapidly as regularly scheduled work for the Board will permit, that deadlines will be set by the Secret Service and that, c° 12,ar as possible, requests for the printing of such far'Is, together with the necessary information, will be rIlfnished by the Secret Service throughout the year 15-hor than allowing a number of cards to accumulate for V.:Lilting at one time. On the basis of the work load in s';17, duplicating section in recent years it would be posto print and distribute fifty cards a year with atie de otal run of one million without imposing an undue burn on existing staff and equipment. the s"The Board is glad to continue its cooperation with ecret Service in printing and distributing counterf ee rit warning notices because of the interest of the FedReserve System in assisting you in every way in the t'c',Ppression of counterfeiting and in rendering a service banks throughout the country." Approved unanimously. Letter to Mr. Sheehan, Chief Examiner at the Federal Reserve ' 44111t New York, reading as follows: 1325 8/2/49 -8- "This refers to your letter of June 22, 1949, and enclosures, submitting information for the year 1948 With respect to the underwriting business engaged in by Shearson, Hammill & Co.; Stillman, Maynard & Co.; and A. M. Kidder & Co. "The Board has considered this matter and you are advised that it does not appear that these firms are Primarily engaged in the business described in section 32 of the Banking Act of 1933 at this time. We underthat your bank makes a review at the end of each 3rea.r of all outstanding relationships under section 321 and especially in view of the growth in the underwriting end distributing business of two of these firms it is . ! asumed that you will keep the Board advised of any IlIrther growth or other important changes in the underwriting business conducted by the above named firms." Approved unanimously. Chairman.
@FedFRASER